Booming Britain facing slowdown

BRITAIN'S booming economy will come off the boil in the autumn, according to the 30-nation Organisation for Economic Co-operation and Development.

The rate of growth will peak in about October and then start to fall, the organisation said on Friday.

Its 'leading indicator' - a sort of early warning system for all the economies of member countries - is also forecasting weakness later this year in America.

But the worst news is in the eurozone countries, which, having failed to enjoy much of the recent international economic upswing, face a decline in their already-low growth rates from this summer.

Germany and Italy are particular weak spots in the euro area, according to the OECD.

For the world economy as a whole, the good times look set to roll until the end of the summer, after which growth rates in the major industrial powers will go into decline.

The OECD's key index, the 'six-month rate of change', takes recent averages from a number of statistics from each country and, according to the organisation, 'provides early and clear signals of economic turning points'.

An economy's peak in growth will come about nine months after its high point on the index.

Friday's figures, which cover February, showed Britain's six-month index falling for the first time since March 2003, suggesting GDP growth will reach a peak in October.

For America, the six-month index peaked in December, as it did in Germany-while Italy's index has been falling since October.

This raises a question mark over Chancellor Gordon Brown's own forecast showing growth in 2005 of 3.5%, the same breakneck pace as this year.

Taken together, the euro area's index reading peaked in November, though one bright spot is France, whose showing on the six-month index hit a high point in January and stayed at that peak in February.

All 15 European Union member states, taken together, reached their highest index reading in December.

The past 12 months have seen boom conditions in the so-called Anglo-Saxon economies, with growth of 4.1% in America, 5.5% in Australia and 3.4% in Britain. Low interest rates, big American tax cuts and higher public spending have played their part in pulling businesses and consumers out of the gloom that struck during the run-up to war in Iraq a year ago.

Even Japan, which has been stagnant for more than a decade, is experiencing growth of 6.4%.

But the climate has been much less sunny in the eurozone, where growth has been just 0.9% in Germany, 1.8% in France and zero in Italy. For the euro area as a whole, annual expansion is 1.2%.